UBS raises USD/JPY forecast on elevated energy prices/ - Investing.com Nigeria

What the desk is arguing

The USD/JPY forecast increase by UBS signals a broader trend where higher energy costs could lead to a more hawkish stance from the Bank of Japan. The rising prices exacerbate inflationary pressures in Japan, prompting speculation that the Bank might shift its ultra-loose policy sooner than previously expected.

Additionally, with the current spot at 157.0000, the market appears to be pricing in a sustained period of elevated energy costs, which is likely to put further downward pressure on the yen. UBS's move aligns with other market participants who are factoring in these risks, although the consensus remains conservative going into 2026.

Where it sits in our coverage

Our consensus target for USD/JPY is currently at 147.5000 for December 2026, reflecting a divergence from UBS's revised outlook. Firms are projecting a broad range, with individual estimates from 150.0000 to 164.0000, highlighting the uncertainty and differing views surrounding the currency pair's direction.

Specifically, the following firms have published their December 2026 targets:

• JPMorgan: 164.0000
• Goldman: 148.0000
• Morgan Stanley: 140.0000

How other firms see it

Several other firms are taking a more tempered view on USD/JPY, reflecting cautious optimism amid the energy price shock. Goldman and Morgan Stanley maintain relatively conservative targets, suggesting that while UBS's outlook could gain traction, it is not universally accepted.

• Goldman: 148.0000
• Morgan Stanley: 140.0000
• MUFG: 146.0000